HOT & RELEVANT TOPICS
How Short-Term Rentals Have Adapted
First they were considered a threat to the industry. Then they were the solution. Then skepticism surrounded short-term rentals as several providers operating under a master lease agreement struggled due to the volatile market. Now that the dust has settled, popularity in these flexible market options has returned and is projected to last well beyond the pandemic, but operators have learned a few key lessons. One is that master lease agreements carry some risk, and many have pivoted to a revenue-sharing structure. Another is that teams have to be prepared for more frequent turns with the short-term model.
The Poor State of Lead Sourcing in Multifamily
For all the advancements the multifamily industry has made to optimize the prospect experience, many operators continue to struggle with accurately sourcing their leads. A recent Anyone Home analysis of one sizable apartment operator found that the organization’s lead sourcing accuracy was only 56%. This stat, according to many, is fairly typical across the industry. The hazard with poor scoring is that communities don’t have a clear picture of where to allocate marketing dollars. Cutting-edge software can help eradicate many of these inaccuracies, many of which derive from manual processes, such as the failure to delete duplicate data.
Implementing the Right Technology to Maximize ROI
New property technologies burst onto the scene during the pandemic, as multifamily operators scrambled to maintain operations via contactless means and with a reduced onsite presence. The new product menu has been enticing, but technology implementations should provide lasting value and deliver a long-term return on investment. Band-Aid solutions can be inefficient and wasteful, particularly when they don’t integrate with management systems and other existing technology. Operators need to be judicious with their tech investments and take the time to properly vet innovations to assess their potential impact on property teams, the company, investors and residents.
IN THE NEWS
How Will Remote Work Affect Housing Post-Pandemic
Approximately 40% of employed adults believe they will have some form of remote-work flexibility after the pandemic, with 21% believing they’ll have the ability to exclusively work remotely. This could have a significant effect on the housing market, as remote workers will no longer prioritize being nearby an office. As such, 42% of remote workers indicated that they plan to relocate within the next year, according to an Apartment List survey, while only 26% of onsite workers said the same. Among those remote workers, 35% indicated that they plan to move to a more affordable market.
Accelerating Prices, Scarcity of Materials Means Construction Delays
The skyrocketing cost of lumber and other key construction materials has been the industry’s hot-button issue of 2021. Lumber prices have risen 34.3% since December alone. It is disrupting the industry, as developers are forced to either opt for cheaper, less-quality materials or simply assume higher costs, which impacts the entire financial chain of building an apartment community. These exorbitant costs are making it even more challenging for the industry to develop affordable housing. As such, industry leaders have been pressing the Biden Administration and Congress to intervene.
More Apartment Dwellers Are Staying Put
As single-family home prices rise, more apartment dwellers are opting to stay where they are. The main cause for the hesitation in buying a home is due to a rising cost in materials, such as lumber. Also, supply shortages are leading to higher home prices, a rise in interest rates and prolonged construction times. While the national median home price hovered around $320,000 in the first quarter, mortgage rates increased by 11 basis points in the same timeframe. The five least affordable major markets are all located in California, led by San Francisco. The most affordable major market is East Lansing, Michigan.